Many corporations use our CFROI methodology as an objective measure of internal operating performance and as a profitability benchmark when making critical decisions. Several industry leading companies use the CFROI metric to communicate performance to shareholders and to their Board of Directors.

Helping a retailer get a better view of its own performance

The challenge

A large US retailer needed a clear, comprehensive picture of its operations to reveal which business units were acting as the true drivers of value.

Our solution

We helped the company develop an internal performance measurement framework based on the CFROI measure. The metric served as a comparable measure of operating performance across business units and as a means of setting corporate strategy.

The outcome

The HOLT treatment of goodwill, operating leases and inflation adjustment serves the company well due to its acquisitive history and broad mix of assets.

Making more effective comparisons among a conglomerate's disparate businesses

The challenge

An industrial conglomerate was beginning to lose its focus as a result of unexpected problems during the integration of several recent acquisitions.

Our solution

We worked with the company to add the interactive HOLT platform to its business strategy and M&A toolbox. The company then began evaluating its 50-plus units using the comprehensive CFROI metric. The metric also serves as a key component when the company is deciding how to pare and grow its portfolio of businesses.

The outcome

The client can now make comparisons between its dissimilar units more easily after the HOLT adjustments of capitalizing R&D, capitalizing leases and accounting for asset life are taken into consideration.